Investing in Bitcoins

The Bitcoin is a digital currency which is not issued by a government. Investing in Bitcoins has become very popular lately. Since the creation of the Bitcoin in 2010, the value of the digital currency has increased rapidly.

What are Bitcoins?

The image above is a bit misleading, since Bitcoins are only available digitally. The internet currency was actually invented by a hacker. Bitcoins can be transferred without the intervention of a bank. As a result, there are hardly any waiting times for transferring money and transaction costs are extremely low to non-existent. Bitcoins are also difficult to trace and are therefore popular as a payment method in the criminal circuit. Nowadays, more and more companies all over the world accept Bitcoins as a means of payment.

How to get Bitcoins?

Before you can collect Bitcoins, you need a digital wallet. This is where you store your Bitcoins. A reliable wallet is Coinbase. The easiest way to get Bitcoins is by simply buying them with euros or dollars.

However, you can also get Bitcoins by mining: solving a complex mathematical formula with your computer. If you manage to solve that formula, you will find a number of Bitcoins. This process can be compared to finding gold. As with the precious gold, the number of Bitcoins is limited. There can never be more than 21 million Bitcoins in total.

Price increase Bitcoins

The demand for Bitcoins has increased faster than the supply since its inception. The first time the price increased sharply was in the final months of 2013. In November of that year, one Bitcoin was worth $ 1000.

In December 2013, the rate plummeted after the Chinese central bank imposed restrictions and warned that the digital currency would encourage money laundering. A few months later there was trouble again: the biggest trader in Bitcoins, the Chinese company Mt. Gox went bankrupt and lost 850,000 Bitcoins. They had an estimated value of around 300 million euros. Confidence in the Bitcoin had been severely damaged and the price of the digital currency started to drop.

In 2016 the price of the Bitcoin started rising again. This is clearly visible in the graph below, which shows the price development of the Bitcoin. In 2017 the price of Bitcoin skyrocketed: the Bitcoin reached a record value of 3,000 dollars in June 2017. Partly thanks to the news that Japan accepts the Bitcoin as official payment method.

The Bitcoin price reached a record high in December 2017. The digital currency almost reached a record high of $ 20,000 after which it again started to drop.

How do I invest in Bitcoins?

The easiest way to invest in Bitcoins is to buy them on the market. It is not complicated and very cheap to store them. After all, this can be done online: for example, at Coinbase. In addition, it is possible to buy contracts that follow the price of the Bitcoins. You can do so with one of these CFD brokers.